Panel votes against accreditor of for-profit colleges

WASHINGTON – An advisory panel to the Education Department voted Thursday to recommend the government sever ties with a group that accredits many of the nation’s for-profit colleges, including schools once owned by the now-defunct Corinthian Colleges Inc. — a critical vote that could lead schools to close their doors and threaten financial aid to hundreds of thousands of students.

The final decision on whether to revoke federal recognition of the Accrediting Council for Independent Colleges and Schools, the nation’s largest accreditor of for-profit schools, will be made by a senior official at the department in the next few months.

After that, if the department goes along with the recommendation, the hundreds of schools now accredited by the council would have to find a new accreditor in 18 months or lose their ability to participate in federal financial aid programs, such as student loans and Pell Grants.

The council has been accused of lax oversight at some of its schools. The council oversees about 250 colleges and schools and more than 600 additional campuses in 47 states, covering some 800,000 students. Its schools received $4.7 billion in federal aid for students last year.

During the meeting, which lasted more than 10 hours, the head of the council acknowledged missteps.

“We sincerely believe that we can solve and address the legitimate issues the department has flagged,” Anthony Bieda said. “We do not say this lightly and we take the department’s concerns very seriously.”

Bieda said the council had made changes, including stepped-up monitoring of its schools, new leadership and a committee to review standards and practices.

That wasn’t enough for the independent advisory panel, which voted 10-3 against continuing recognition of the council.

“This agency failed to act in an appropriate and timely manner,” said panel member Ralph Wolff. He said the council neglected to dive deeply into years of allegations of fraud and misrepresentation for some of its schools.

“I know this is going to disrupt human lives,” said panel member Kathleen Sullivan Alioto. She said she hoped the vote “will send a signal” to accreditors to take their responsibilities seriously.

Last week, a staff recommendation from the department proposed withdrawing recognition for the council, saying “its monitoring regime appears insufficient to deter widespread misconduct regarding placement, recruiting and admissions.”

Advocacy groups, lawmakers and others have long complained about the council. It has been accused of continuing to accredit schools under investigation for falsifying job placement rates and claims for federal aid, illegal recruiting practices and misleading marketing claims.

The council had allowed Corinthian Colleges, one of the largest chains of for-profit colleges, to continue to receive accreditation even while it was under investigation for fraud. Corinthian sold many of its campuses, closed others and filed for bankruptcy protection last year. Thousands of its former students are asking the Education Department to forgive their federal loans, in a taxpayer bailout that could top $3 billion.

Other council-accredited schools, such as ITT Technical Institute, are currently under investigation.

Finding new accreditation for schools would take time.

“Under the best of circumstances, it takes schools a year to 18 months to get accredited,” said Terry Hartle, senior vice-president of the American Council on Education.

Hartle said institutions that have experienced problems, such as ITT, “are probably not going to be the first ones to receive accreditation from other accreditors. They’re going to be looked at very carefully.”

At some schools accredited by ACICS, students said this week they didn’t know that their institutions were at risk of losing accreditation.

At Salter College in Malden, Massachusetts, near Boston, Maria Depina said she plans to finish her program and become a medical assistant before any 18-month deadline passes, but she worries about other students.

“I have a couple friends that are talking about coming to school here,” said Depina, of Dorchester, Massachusetts. “I don’t want them to be stuck in the middle of nowhere.”

Financial aid during the time schools would need to find a new accreditor would not be affected. However, federal aid would cease after the 18-month deadline if affected schools don’t get a new seal of approval from an accreditor. Students caught up in the mess also might be able to transfer their credits to new schools.


Binkley reported from Boston.